FINE Gael leader Enda Kenny will today kickstart talks with Labour leader Eamon Gilmore on a deal for a new government following a momentous general election.

He will phone Mr Gilmore -- paving the way for urgent negotiations to form a coalition.

After both parties won record numbers of seats, Fine Gael and Labour were given the platform to carve out a new deal to help steer the country to recovery.

They will form the next government with a combined total of more than 110 seats when the Dail resumes on Wednesday week.

But the clock is ticking for the negotiations to be completed, as Labour will have to pass a coalition deal through a party conference next weekend.

Earlier yesterday, senior Labour figures were annoyed by the lack of contact from Fine Gael and questioned if the party was talking to Independents.

But Fine Gael sources dismissed the suggestions and confirmed Mr Kenny will finally phone Mr Gilmore today. "The Fine Gael leader will be in contact with the Labour leader," a senior party source told the Irish Independent.

Counting of votes is still continuing in three constituencies and the final outcome is not expected until later today.

Fianna Fail lost three-quarters of its seats in the election and is battling to get just 20 TDs elected.

Fuelling speculation that Fine Gael was keeping its options open, the party's frontbench spokesman Leo Varadkar refused to rule out a coalition with like-minded Independents.

"We do need to form a government but that government has to be an effective government," he said.

Earlier in the day, a Labour source said there was little indication of talks from Fine Gael.

"The radio silence is quite significant," the source said.

"I am not quite sure what their strategy is or whether they are talking to Independents," another source said.

Fine Gael still has twice as many TDs as Labour. This has led to an expectation that the bigger party would have 10 places at the Cabinet table, compared to Labour's five. Fine Gael is also expected to demand the Finance Minister's portfolio.

Phil Hogan is expected to be appointed by Mr Kenny to head up his party's negotiating team with Ruairi Quinn filling that role for Mr Gilmore. Labour is thought to have already booked a venue on the southside of Dublin city to host its special delegate conference next weekend. The party's ruling body, the Central Council, will also meet before formal talks begin.

Gains

Fine Gael is on track to win up to 77 seats, easily surpassing its best tally of 70 under Garret Fitzgerald's leadership in 1982.

Labour will possibly win as many as 38 seats, well above the record of 33 under Dick Spring in 1992. The party is now the biggest in Dublin.

Sinn Fein also made substantial gains, potentially trebling its seats to 15. Independents and other groups will win as many as 18 seats, with several high-profile arrivals and a large coterie of hard left-wing TDs.

Turnout in the election at 70pc was up on the previous general election.

The Green Party was wiped out, losing all six of its TDs, but party leader John Gormley vowed to rebuild the party.

Fianna Fail's worst ever result saw the party drop from 78 TDs down to possibly as few as 20.

Among the heavy-hitters to lose seats were Tanaiste Mary Coughlan, Fianna Fail deputy leader Mary Hanafin, former minister John O'Donoghue and junior minister Sean Haughey, the son of former Taoiseach Charles Haughey.

The party will be left without TDs in 24 constituencies, including the counties of Meath, Kerry, Roscommon, Leitrim, Louth and Tipperary.

Finance Minister Brian Lenihan is the party's only TD in Dublin -- out of 47 seats.

Fianna Fail leader Micheal Martin said he was now beginning the process of rebuilding the party. He said he would have to change the structure of Fianna Fail as part of his plan to "restore trust with the people".

He admitted it was the most disappointing result in Fianna Fail's history. But he denied his party would be on the backbenches for a decade. "Let's concentrate on the next five years and see what happens," he said.

A record number of 23 women were elected, but this figure may rise to 26 when the remaining counts in Wicklow, Galway West, Laois-Offaly and Galway East are completed.